Home Resales Blow Past Expectations; Put Talk Of “Double Dip” To Rest
It’s confirmed — housing is recovered from its Summer Pullback. All that talk about the federal home buyer tax credit “pulling sales forward” can be put to rest.
Housing has re-found its balance.
Home Sales Are Surging
Existing Home Sales leapt 12 percent last month, closing 2010’s housing market with strength. An “existing home” is a home that cannot be categorized as new construction; a resale.
According to the National Association of REALTORS®, seasonally-adjusted, annualized Existing Home Sales figures climbed by more than a half-million units in December as compared to November.
It’s the 3rd straight month of gains and sales volume is now as high as it’s been since May 2010. This was one month after the tax credit’s expiration, and the start of a housing tailspin that some called a double-sip.
Today, it’s clear those assertions were overblown. Not only has sales volume returned to its multi-year average, but the months of housing inventory has dropped precipitously.
At the current pace of sales, the national inventory of homes for sale would be gone in 8.1 month. This is 1.4 months faster from November, and the biggest one-month home supply improvement in 2 years.
It’s yet another signal that the housing market is in recovery. Not that this data should surprise anyone. November’s Pending Home Sales report told us to expect it two weeks ago.
Home Buyers, Broken Down By “Type”
The Existing Home Sales report also lists how buyers break down by “type”. This, too, is data from which we can make an inference on housing.
- First-time home buyers : 33% of all sales
- Repeat buyers : 47% of all sales
- Real estate investors : 20% of all sales
Last year at this time, first-time buyers dominated the market. This year, it’s repeat buyers — a class that includes “move-up” families. There is pent-up demand among this class that was hit particularly hard in the recession of 2008-2009, and it’s likely that move up buyers will dominate the 2011 market.
This bodes well for luxury home sellers, and sellers in markets like Lower Merion Township in the suburbs of Philadelphia, and the Indian Hill area of Cincinnati.
In addition, cash buyers represented 29 percent of all transaction, down 2 ticks from November. This suggests that mortgage guidelines may be loosening — another sign of economic improvement.
Playing Home Sales Data To Your Advantage
Take note, home buyers. This spring, along with mortgage rates, sales volume and home values should rise, too. It’s reasonable to expect less “bang for your buck” as the housing recovery takes hold.
The best deals of the year may be the ones made this month.
If you’re shopping for a home right now, or about to get started, call or click here to send me an email. Include some bullet points on your situation and we’ll get working on it together. I answer all my own emails.
(This post adapted from Bring the Blog, a blog-writing service for loan officers and real estate agents)